Our weekly ESG impact tracker explores recent headlines from fast food giants in the Restaurant sector. Domino's and McDonald's present two diverging ESG trajectories that are worth tracking to determine what impact, if any, from a market perspective their recent headlines will have.
For this week’s ESG Spotlight we explore the restaurant sector. Throughout the sector we’ve seen companies place an increasing emphasis on their sustainability narratives. For example, Shake Shack has recently received praise for their commitment to only use cage-free eggs globally. Domino's has also taken active stances in response to today's challenges. Helping to mitigate the effects of COVID-19, they committed to give away 10 Million slices of pizza nationwide. In their recent earnings call our ESG model highlighted additional Corporate Philanthropy efforts when they pledged $3 million in support for African American communities.
Actions like these help to increase the positive image of a brand, and at a time when restaurants as well as hospitality businesses are struggling from the pandemic, positive news is a boon towards long term viability and customer retention.
McDonald’s offers a contrasting ESG trajectory with an Impact Score of -218 this month (-58 Sentiment). This was largely due to the allegations of sexual misconduct surrounding former CEO Stephen Easterbrook. Although Easterbrook is no longer with the company, these stories seem to be the tip of the iceberg in what appears to be a systemic problem within the company.
In past years McDonald’s might have been tempted to sweep this crisis under the rug rather than confront their former CEO. By taking action here they’re signaling a commitment to transparency, reform, and accountability. Time will tell if this is indeed a low sentiment point for the firm that they can improve over the upcoming months.
By using Amenity’s ESG product suite to analyze peer groups you’re able to pick out ESG winners and losers as well as find opportunities in real-time. Moving forward we’ll continue to track McDonald’s to verify if this action does indeed signal a culture turnaround that would see the company better align itself with competitors' messaging.
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This communication does not represent investment advice. Transcript text provided by FACTSET and S&P Global Market Intelligence.
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